Columbia University Professor and eminent economist Jagdish Bhagwati on Tuesday said with Prime Minister Narendra Modi in charge, India was again on the cusp of change, just as it was in 1991.
Delivering the Madhavrao Scindia Memorial Lecture for 2015 here, he, however, had a word of caution: Mr. Modi should say more things to hold back RSS people from saying ‘crazy things’. Naming BJP MP Sakshi Maharaj for his comments, he said, “This is an embarrassment, it holds back economic agenda and over time it corrodes the system.”
Several Cabinet Ministers during the UPA regime, including former Prime Minister Manmohan Singh and P. Chidambaram, attended the lecture. NDA government representatives were conspicuous by their absence, but policy-makers are likely to take note of Dr. Bhagwati’s recommendations as he was a huge votary of the Gujarat growth model in the run-up to the 16th Lok Sabha elections.
Dr. Bhagwati said in 1991, his friend of 60 years, Dr. Singh, when he was the Finance Minister, took the country into the second gear. Calling the 1991 reforms a revolution, he predicts that Mr. Modi would start a similar revolution, but at a faster pace. “The second revolution will now take us into the third gear…Going into the fourth gear needs flying like James Bond — I don’t think we’ll do that.”
Drawing parallels and contrasts he said: “The 1991 reforms were top-down, an outcome of a crisis, which led to elite opinions in favour of change and carried out by a minority government, but since Mr. Modi was by temperament a doer and enjoys huge support he can move faster if he wants to.” Praising Dr. Singh, he said the first revolution was very hard to push through, as it was like clearing up after a tsunami. “They had to clean up the decisions of a quarter of a century.”
Dr. Bhagwati said he was a supporter of the Planning Commission, as it set targets, whereas there would be only policy and idea discussions now. Mr. Modi’s economic policy was likely to be dominated by scale-ups in trade liberalisation and foreign direct investment (FDI) openness. Going by his interactions with the Prime Minister, he said he believed FDI in multi-brand retail would be opened up in about a year’s time.
“His constituency is much wider than the BJP’s traditional support group of traders… ”
Dr. Bhagwati said Mr. Modi must work to raise productivity in the country, for which education was very important.
By allowing the Rajasthan government to take the lead in liberalising the labour market, and at the same time allowing other States to push reforms at their own pace, the Prime Minister had demonstrated that he was not authoritarian.
